Plastics additives are heavily regulated in Europe and the US, however, China is lagging behind. The paper discusses the most recent regulatory developments for plastics additives in China.

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In Western Europe, the environmental effects
of some plastics additives – in particular,
halogenated flame retardants and phthalates
used as plasticizers – have been discussed
for more than a decade. After intensive
studies and assessments, the use of several
of these compounds has been restricted.
In European studies, four phthalates –
di(2-ethylhexyl)phthalate (DEHP), dibutyl
phthalate (DBP), diisobutyl phthalate
(DIBP), and n-butyl benzyl phthalate (BBP)
– were found to have adverse endocrine-
related effects in laboratory animal studies.
The use of two of them, DIBP and BBP,
is now prohibited in REACH-related
applications. The other two, DEHP and DBP,
are categorized as “damaging fertility and
the unborn child”, and their use is restricted
in some applications such as toys.
The EU directive known as RoHS2,
which restricts the use of certain hazardous
substances in electrical and electronic
equipment, gives upper limits for the use
of polybrominated biphenyls (PBB) and
polybrominated diphenyl ethers (PBDE)
of 0.1% as flame retardant in homogenous
materials, therefore also shifting demand
away from these materials to non-
halogenated materials.
promotes moving chemical production into
dedicated chemical parks, where currently
only about 45% of plants are located.
Individual provinces have even set fixed
targets for the proportion of plants to be
moved into chemical parks. This regulation
may strongly affect all those producers of
plastics additives which currently operate
outside of chemical parks. However, it may
also cause disruption in the raw materials
supply for plastics additives and possibly
also on the demand side.
* The plan also has a number of general
environmental targets, such as the substantial
reduction of water consumption, energy
consumption and carbon dioxide emission
per unit of GDP. The targeted 30% reduction
of volatile organic compound emissions
for key industries including chemicals by
2020 may force some producers of plastics
additives to upgrade their emission treatment
technology, or to reduce production.
* For New Chemical Materials, which by
the Chinese definition includes engineering
plastics, the plan sets a target for self-
sufficiency – this is to rise from 63% in
2015 to 82% in 2020. This is an example
for regulation which may actually positively
affect the demand for plastics additives
With regard to environmental protection,
China has in the past generally been
somewhat behind Western European
standards. For example, the level of European
fuel standard Euro V (implemented in 2009)
will approximately be reached by the standard
China V, which will be phased in during
2017. So how is the situation for plastics
additives, both the specific cases mentioned
above and in general? What other regulations
may producers of plastics additives face in the
Chinese market?
Generally speaking, environmental issues
have certainly become more and more
important in China. Some problems such as
air and water pollution have become very
obvious and drawn the attention of both
ordinary citizens and the government. As a
consequence, the most recent Five-Year Plan
(the 13th, for the period from 2016 to 2020)
has environmental protection as one of the
five core themes. This theme trickles down
to the plans for the individual areas, such as
the plan for the chemical and petrochemical
industry. A number of measures in this plan
will certainly also have an impact on the
producers and users of plastics additives. Here
are a few examples:
* The 13th Five-Year Plan strongly
Recent Regulatory Developments
in Plastics Additives in China
Special Report
By Dr. Kai Pflug, Management Consulting – Chemicals, Shanghai/Hong Kong (kai.pflug@mc-chemicals.com)

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in China. An increased share of domestic
production of engineering plastics rather
than a reliance on imports will go along with
a larger domestic demand for the relevant
plastics additives.
How about the areas which have caught
the most attention in Europe – the phthalates
and the halogenated flame retardants?
Start with the phthalates. In 2016, China
enacted the Toy Safety National Standard
GB6675-2014, which limits the content of
6 phthalates in toys to 0.1% (the same limit
is given in an earlier regulation, “Limit of
Harmful Substances of Coatings for Toys,
GB 24613-2009). This regulation seems to
be modelled after the European regulation
as it sets the same limits. In addition,
further restrictions for the use of phthalate
plasticizers are under discussion in the area
of plastics packaging. To facilitate recycling
of such packaging, a draft regulation on
this topic prohibits the use of phthalates
in plastics packaging along with other
substances that may make recycling more
difficult. Currently this is only a draft, with
no clear implementation date set. However,
a number of foreign companies including
Lanxess and Sabic already promote their
phthalate-free alternatives in China.
In addition, the 13th Five-Year Plan
for the chemical industry specifically
mentions the substitution of phthalates
by bio-based plasticizers, presumably
in an attempt to pursue two goals
simultaneously, increased sustainability
via use of a renewable resource and
greater environmental protection.
For halogenated flame retardants, so
far there is no regulation targeting plastics
applications in China. As a consequence,
rather than a lack of regulation in the first
place. This is aligned with the opinion
of industry experts that in general local
implementation of existing regulation is
the weakest link in China’s environmental
protection and safety efforts.
Second, the pressure on chemical
companies to comply with existing
regulation has increased substantially. In
many chemical segments, there have been
reports about factory closures or capacity
reductions due to noncompliance with
environmental regulation. The government
has also started to punish wrongdoers
much more severely.
Certainly, the stricter implementation
of environmental regulation will increase
for those producers of plastics additives
which did not comply with regulation in the
past. Potentially this may lead to a market
consolidation as generally, smaller producers
tend to be less compliant and also have
less resource to upgrade their production
equipment to meet higher emission
standards.
Finally, it should be pointed out that
the growth rate of China’s economy will
also have major impact on the market for
plastics additives. The government has set a
target of an annual GDP growth of at least
6.5% to 2020. For the chemical industry,
the comparable value has been set at 8%.
However, the government aims to focus this
growth in the area of higher-value chemicals
at the expense of commodities. For example,
the government forecast for annual PVC
growth to 2020 is only 4.6%. So, for certain
plastics additives such as PVC plasticizers,
demand growth may end up being well
below GDP growth. 
the use of flame retardants in plastics tended
to be much lower than in Western markets,
and a large share of domestically produced
flame retardants is exported. However,
recently some of the domestic producers
have been adapting their products to comply
with regulations in other regions, such as
REACH, ROHS, etc. And China has enacted
its own regulation for electronic products,
which so far not restricts the use of materials
such as PBB and PPDE, but mandates that
these substances are already to be indicated,
possibly hinting at a later prohibition. Stricter
building codes in China will likely also
increase the overall domestic demand for
flame retardants.
Global producers of non-halogenated
flame retardants have taken note. In 2016,
Budenheim announced that they will strongly
increase their capacity for ammonium
polyphosphate, a non-halogenated flame
retardant, at their Chinese production site
as a consequence of the strong growth in
Asia. BASF in China has started promoting
a polymeric flame retardant in expandable
polystyrene, PolyFR, which replaces the
flame retardant hexabromo cyclododecane
(HBCD).
However, the most important and relevant
change for plastics additives producers
related to regulation may be a tightened
implementation of existing regulation.
A number of factors have led to this
development.
One of them is the series of explosions in
chemicals warehouses in Tianjin in 2015,
which caused about 180 deaths and billions
of dollars of damages. The severity of the
explosions was largely caused by non-
compliance with existing Chinese regulation